President Donald Trump could make the trade war with China worse at the G20 summit, experts at Goldman Sachs predict. Business Insider UK reports that a memo from the investment bank indicates that they believe there’s an “over 50 percent probability” that the trade dispute will escalate as a result of Trump and Xi Jinping’s sideline discussions at this year’s summit in Buenos Aires, Argentina.
“We currently see ‘escalation’ as the most likely outcome in the next few months..” read the note.
As Business Insider notes, so far the Trump administration has implemented tariffs on approximately half of all Chinese goods imported into the United States. China has retaliated by introducing tariffs of their own on $110 billion worth of US products.
As The Inquisitr previously reported, Donald Trump has threatened to increase the tariff from 10% on the price of goods to 25%. He has also said that he would extend the tariffs to all Chinese goods instead of just half, Business Insider reports. That will affect $500 billion worth of goods. China’s government has also promised to increase the scope of their tariffs as well if the United States makes good on its tariff threats.
Goldman Sachs has also predicted that Presidents Trump and Xi Jinping could make a “deal” that would pause the trade rift. But they put that outcome at a 10 percent probability in the short term.
“The chances of a comprehensive deal are pretty low in the near term (10%), though rising over the course of 2019,” Goldman Sachs said. “By late 2019, however, we think it is likely we will have at least reached a ‘pause.'”
In the bank’s estimation, a pause would not remove the existing tariffs but would mean that they won’t be increased or extended to additional goods. It would also see the potential for more talks between the two global economic giants.
The BBC reports that Trump has said that China has offered a deal to settle their trade dispute. But before he left for Argentina, Trump said that he “likes” the deal that is in place right now.
As the BBC notes, Trump fired the first shot in this trade war with China when he claimed that China used “unfair” trade practices against the US. In July, he started implementing the tariffs on $34 billion worth of Chinese products. By September 2018, tariffs on $200 billion in Chinese goods were implemented, Bloomberg notes.
The G20 summit is also expected to tackle other contentious topics besides the US-China trade war, AP reports. Some of those topics include the war in Syria, conflicts in Ukraine, and the murder of journalist Jamal Khashoggi at the Saudi Arabian consulate in Turkey.